Nairobi, Kenya: The Kenya Climate Innovation Center (KCIC), an initiative of the World Bank and its global entrepreneurship program infoDev — has officially launched the first-ever support program for crowdfunding in East Africa.
In its pilot phase, the program has helped six clean-tech ventures design, develop, and launch their online crowdfunding campaigns.
Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people through an online platform. In developing countries, the market is in its infancy, but the potential is significant.
The World Bank/infoDev study—Crowdfunding's Potential for the Developing World— estimates that the market could reach up to US$90-96 billion per year by 2025. The results also show that from an income perspective the number of households in developing economies that could participate in crowdfunding ranges from 240 million to 344 million.
“By helping entrepreneurs connect with a global pool of investors, crowdfunding may represent a new tool that can address a funding problem faced by many local green ventures” said Diarietou Gaye, World Bank Country Director Kenya. “The development of a competitive clean technology sector will be instrumental toward a low-carbon economy and Kenya is taking important steps to reduce carbon emissions and increase resilience to climate change in accordance with its National Climate Change Action Plan.
To help Kenyan entrepreneurs tap into the crowdfunding market, the Kenya CIC, with the technical support of Crowdfund Capital Advisors (CCA) has developed a set of advisory services specifically designed to help local green ventures conduct effective crowdfunding campaigns and utilize the full range of crowdfunding platforms focused on African projects.
“Despite the growing number of small and medium-sized enterprises interested in crowdfunding in emerging markets, information and data on the topic is scarce and difficult to find,” said Edward Mungai, CEO of the Kenya CIC. “The ultimate goal of this project is to assist local ventures in making the most of this innovative form of financing.”
To roll out the program, the Kenya CIC held a national pitching competition last August to select a first pool of local ventures that had 'crowdfunding potential'. The six winning companies—Wanda Organic, Global Supply Solutions, iCoal Concepts, Skynotch Energy Africa, Develatech, and the Human Needs Project—have received four months of mentorship and training to design and test their crowdfunding strategies. Four of these clean-tech ventures—Wanda Organic, Global Supply Solutions, iCoal Concepts, and Skynotch Energy Africa – just launched their campaigns on Indiegogo, while the other two will go live later in March.
The data captured by the Kenya CIC on these six companies and their campaigns will be a stepping stone to a better understanding of the challenges and opportunities of crowdfunding in the country.
The KCIC is part of infoDev’s Climate Technology Program (CTP), which is currently implementing a global network of innovation centers across seven other countries. The KCIC is supported by the government of Denmark, UKAid and the World Bank.
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